Beating the house vs. beating the odds in video keno

Feb 16, 2010 5:08 PM
Cluster Keno by L. J. Zahm |

Last week, in discussing some of the lower paying keno tables, I mentioned "breakage," in the context of the ever-increasing house edge.

I received several requests to clarify the point and give some examples of when and if the breakage makes a game unplayable.

By "breakage" I was of course referring to the casino’s "hold" percentage – the amount they keep after collecting all the bets and paying off all the winners.

In Nevada, slot machines collectively have a relatively small breakage, about 6.1 percent in 2009 (although the hold on penny slots was over 10 percent), according to gaming regulators.

Other games have considerably higher breakage factors: blackjack, 12 percent, baccarat, 13.6 percent, and race betting, 15.6 percent, to name a few.

Very often the most vehement adherents to the notion that video keno and other electronic games are unplayable are the sports bettors, who like to cite their handicapping skills as enough to overcome their breakage, which was about 6 percent in 2009 – which is slightly better than the average hold on most video keno machines.

No one, myself included, has ever advocated that you can beat any game on a consistent basis. Luck is always a factor. And since our play takes place in the short run, anything can and does happen to cause the hold percentage to vary wildly.

What’s key to me and other keno players (and video poker players) is the odds to win versus the payback.

For instance, one of the reasons I stopped playing video poker is because the payoff for a royal flush is so far removed from the odds to hit it. Most machines pay only 800-1 for a natural royal, whose odds are a whopping 41,000-1.

By contrast, catching 7-out-of-7 on a keno machine pays a healthy 7,000-1 at about the same 41,000-1 odds. Stated another way, for about the same number of games, the keno jackpot pays off nearly nine times greater!

Other winners such as 7-of-8, 6-of-6 and 8-of-9 offer similarly lucrative payoffs. For instance, 7-of-8 pays 1,650-1 – more than double that of a royal flush – but the odds of hitting it are only 6,232-1, about one-seventh the odds of catching that elusive royal flush.

So why do most video poker machines have a higher return percentage to the player? Because they have more frequent payoffs of the "small" variety – all those pairs, three-of-a-kinds, straights, etc.

If there’s an advantage to playing video poker, theoretically, it’s your bankroll will probably last longer because you’re getting more frequent paybacks, even if its just a return of your bet for jacks or better.

The higher house hold or breakage associated with video keno becomes a significant factor when you don’t have a large enough bankroll. If you only have $20 and you choose to play a dollar machine, you limit yourself to very few games. Thus, you’d be better off to play a nickel machine where you can give yourself a greater sample in which to capitalize on those lucrative payoffs.

The situation is not unlike one for the astute poker player, who may be holding a relatively poor hand, but because of favorable pot odds, will win in due course – if he has a large enough bankroll to weather the down periods when he doesn’t catch the right card on the river.

As noted, I won’t claim that I can win at will. I don’t think anyone can, even those snobbish sports bettors, who have to overcome a 10 percent breakage on their average straight bet (25 percent for parlays).

But I do enjoy playing the game, especially when you find something – cluster of numbers, cashing out frequently, etc. – that seems to "work." The rewards are well worth the shot.

Watch every Tuesday for a brand new Cluster Keno article.

Question? Comment? E-mail me at: LJ Zahm